The Merger & Acquisition (M&A) process encompasses multiple stages. It is often mistakenly believed that the sign-off and related announcement mark the conclusion of the process. Post-merger integration is vital final step to ensure success.
Surprisingly, a year or two after a merger or acquisition, annual financial statements reveal that a particular acquisition has been written off due to poor performance. The related outcome can be avoided by taking the post-merger integration phase seriously. Therefore, striking a balance between mandatory actions and optional improvements.
It is advisable to appoint a dedicated individual (or team) to lead the integration of the two companies. In cases of an almost equal merger, both sides must find a collaborative approach. When integrating a smaller company, it is essential to have a clear plan outlining where to start and how to proceed, including a timeline for completion.
Not all aspects need immediate integration. The immediate focus should be on capturing easy synergies along with the most obvious ones.
Cisco serves as a leading example of successful post-merger integration. Hence, allocate dedicated resources and typically have a vision for how the acquired organization will fit into their overall offering during the Due Diligence phase. Often, the acquired company continues to operate under its original name, demonstrating flexibility in their integration strategy.